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A Healthy Dose of Customer Strategy

Building Trust in the Healthcare Industry

Achieving customer trust can put healthcare firms in a position of competitive strength that can lead to long-term financial gains.

March 2011

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Any long-term relationship, professional or personal, is based on trust. This is true in healthcare just as much as it is in any other industry. Trust is often the primary driver of consumer behavior in healthcare, and the most trusted companies in the healthcare ecosystem will be the ones that can successfully influence and guide those behaviors toward positive health outcomes for consumers and profitable financial outcomes for shareholders.

To be trusted, and trustable, an organization needs to embrace two critical objectives: doing things right and doing the right thing. Don Peppers and Martha Rogers, Ph.D., write that acting with customers' best interest in mind is the key to business sustainability:

"Any definition of trust should comprise two elements: competence and intent, because no high level of competence will encourage trust unless it is paired with a philosophy that puts the customer's interests front and center. An organization can't be self-oriented; it must be you-oriented, where 'you' is the customer. The most trustworthy organizations, then, are the ones that ensure through their operations that transactions are secure and private, but also act in the customer's best interest even when doing so may result in short-term costs."

There are many players in the healthcare space--physicians, hospitals, insurance companies, information portals, pharma companies, device manufacturers, government agencies, and others--each with the potential to build trust-based relationships with patients. To be the mosttrusted player in the healthcare ecosystem is a position of competitive strength that will lead to reputational and financial benefits for any company that achieves it.

Here are how some organizations are building trust with their constituencies today:

HospitalsThe University of Michigan Health System, which is composed of hospitals, health centers, and clinics that serve about 44,000 customers in southeast Michigan, has created a culture of accountability. Since 2001 the organization has disclosed medical errors to patients and family members, and offered compensation when employees are found at fault.

Greg Gillespie, editor-in-chief at Health Data Management magazine, recently commented: "Instead of building a wall of silence around its mistakes--a common strategy that ensures that most of them will not be addressed clinically or via information technology--the health system decided to be honest with itself and its patients."

As a result of this proactive approach, the average transaction expense per case dropped from $48,000 in 1997 to $21,000 in 2003. The hospital's malpractice reserves have been cut from approximately $72 million to $15 million. And costs of defending cases decreased from $3,083,792 in 1999 to $1,123,636 in 2003, according to the report "Restoring Value and Trust in Our Health Care System: Achieving Real Medical Liability Reform With an Early Disclosure and Compensation Model," by Peter B. Smulowitz, MD, MPH.

In another example, the Centers for Medicare and Medicaid Services (CMS) proposed regulations that would establish a value-based purchasing program to reward hospitals for providing high-quality, safe care for Medicare and Medicaid patients. The program would make value-based, incentive payments to acute-care hospitals. Those payments would be based either on how well the hospitals perform on certain quality measures, or how much the hospitals' performance improves on certain measures from their performance during a baseline period. According to the CMS, the higher the performance, the higher the incentive payment will be.

And in January 2011 the CMS instituted "The Medicare and Medicaid EHR Incentive Programs" to provide incentive payments to physicians and hospitals as they adopt, implement, upgrade, or demonstrate meaningful use of certified Electronic Health Record (EHR) technology.

InsurersHealth insurers have a lot to do to improve their stature with patients. As new regulations begin to take effect, insurers that go above and beyond mandates in order to help patients are the ones that will stand out. UnitedHealth Group, for instance, already offers a plan called Personal Rewards that uses personalized online scorecards to create healthcare road maps for consumers based on health status, lifestyle, and personal health needs. Incentives to participate include savings on an employee's monthly premium, extra money for a healthcare account, or cash payments.

The scorecards help people track their progress and keep tabs on the health actions they can take in order to earn incentives. As individuals complete the actions their point scores increase, making them eligible for greater rewards and potentially improved health, which may result in medical expense savings. Some actions, such as preventive doctor visits, are available to all participants, while others are customized to an individual's life stage or health status, such as getting a mammogram or enrolling with a health coach.

And at CIGNA Customer Experience Officer Ingrid Lindberg says her goal is to provide clear language to consumers and to understand their needs. The company set up employee resource groups, representing different races and cultures among its employee base. These groups share their unique cultural knowledge with Lindberg's team to help them understand the attributes of certain customer groups. In one example, Lindberg learned that people of Haitian Creole descent meet anything touted as "free" with skepticism, because it's now owed and needs to be paid back. As a result, the company removed the word "free" from its preventative care materials sent to Haitian communities.

"Understanding what their drivers are has helped us craft different strategies that allow us to be more successful in our outreach programs," Lindberg says. In another example, she discovered that a first-generation Mexican American woman working with CIGNA on a weight loss program didn't lose weight because she counted the seven tortillas she ate per day as utensils, not food. That added up to 1,000 calories per day. "We were able to take that learning and expand and extend it to anyone who fell into that socioeconomic, cultural demographic group [with proper messaging]."

EmployersIn many cases employers can be the trusted advisor when it comes to their employees' healthcare. The U.S. Army, for example, invested in new technologies to help improve soldiers' medical care.

The program, which the Army calls mCare, allows soldiers with mild traumatic brain injuries to keep in touch with Army caregivers via a mobile app. Soldiers can schedule appointments and receive reminders, health and wellness tips, recovery goals, and general announcements from a secure central website. Patients can transmit to caregivers information to track body weight, moods, energy levels, sleep patterns, pain levels, relationships, anger management, and their overall sense of well-being. The app was developed by Diversinet, which provides mobile applications for the healthcare space.

According to Mobile Health News, each mCare patient receives a minimum of six messages per week, meeting or exceeding the Army's required contact rates for Wounded Warriors receiving outpatient care in their home communities. Since the project deployed in June 2009, more than 2,200 messages have been sent with an over 87 percent response rate. Of those messages, 63 percent were for appointment reminders, 17 percent were related to health and wellness tips, 12 percent were messages about the soldier's unit, 7 percent were suggestions for other resources, and 1 percent were free-form text messages.

Government agenciesFederal and state agencies are slowly opening up access to health insurance information, providing transparency and information about rates, plan comparisons, and more. For example, the U.S. Department of Health and Human Services in October added tools to its consumer website http://www.healthcare.gov/. Price estimates for private insurance policies are available, allowing consumers to compare individual health insurance plans--putting consumers, not their insurance companies, in charge by providing one-stop shopping and taking the guesswork and confusion out of buying insurance.

Insurance providers are now required to provide the percentage of people who applied for insurance and were denied coverage, as well as the percentage of applicants who were charged higher premiums because of their health status.

More than 225 insurance companies have provided information about their individual and family plans for more than 4,400 policies, including policies in every state and the District of Columbia. Consumers can search for and compare information on plans available to them based on their age, gender, family size, tobacco use, and location.

California and New Hampshire insurance departments have also opened up access to information regarding health insurance in their respective states. And in California, residents can submit comments to help regulators review whether insurance rates are in accordance with state laws.

These examples indicate that all players in the healthcare ecosystem have the opportunity to build trust. Our own research shows that consumers today overwhelmingly view the provider (i.e., doctor) as being the one with their best interests at heart (see "Healthcare's Love-Hate Customer-Insurer Relationship"). Other players must work harder to win the trust of consumers, using the natural advantages inherent in their industry business model. As we begin to create the new "normal" in healthcare, all players can fight the battle for the role of trusted advisor, in which long-term loyalty and profitability are the spoils.